Region sees biggest increase in company administrations in 2016

MORE than 170 businesses in the Yorkshire and the North East entered administration last year, according to analysis from Deloitte.

The total of 176 company administrations is a 5% increase on 2015 – the biggest increase of any region in England and Wales – but the annual total is still well down on the 203 recorded in 2014.

Across all industry sectors, the total number of administrations in England and Wales fell from 1,147 companies in 2015 to 1,110 last year, down 3%. Four industry sectors reported an increase in administrations, with the greatest increase being Mining, Energy & Agriculture with a 22% increase, followed by Financial Services with a 16% increase in administrations.

Regionally, more than a quarter of total administrations were based in London (313 appointments), with appointments increasing by 4% relative to 2015. The North West remained the second-largest contributor to administration appointments in 2016 (220 appointments), despite seeing the greatest reduction in appointments year-on-year (down 16%). Of the 92 retail administrations in 2016, 38% took place in London (35), with 17% in the South East (16) and 16% in the North West (15).

The number of retailers entering administration fell from 96 in 2015 to 92 in 2016, a decrease of 4%, but for the first time in four years there was an uptick in the number of large multi-site retail administration appointments, rising from seven in 2015 to 11 in 2016.

Dan Butters, restructuring services partner at Deloitte, said: “Retailers have largely benefited from relatively robust consumer confidence over the last 12 months. Only seven of the 92 retail insolvencies in 2016 had a footprint of more than 20 stores.

“However, consumer confidence may be challenged in 2017 by the impact of price inflation in the year ahead. In addition, retailers are likely to be faced with additional cost pressures due to a weaker sterling, impact of the National Living Wage and, critically, business rate increases.

“Successful retailers in 2017 are likely to be those that can differentiate their customer experience, be innovative in their pricing and sourcing strategies and continue to develop technology to better serve customer needs.”